Lurie Taps City Elite to Fund San Francisco's Comeback

This column was reported for Political Breakdown, a bi-monthly newsletter offering analysis and context on Bay Area and California political news. Click here to subscribe.

Mayor Daniel Lurie is coalescing the city’s upper crust to boost San Francisco’s rebound.

Supporters say San Francisco needs every dollar it can get — as the city faces a nearly $1 billion budget deficit — to make progress on scant affordable housing, rising overdose rates and a struggling downtown economy. Federal spending cuts threaten even more financial problems.

But Lurie’s power play has also raised eyebrows among some government ethics watchdogs who see a small but powerful business class gaining influence in City Hall.

This week, several Lurie supporters announced the Downtown Development Corporation, a new nonprofit that will fundraise for projects aimed at improving street and business conditions. The group is led by David Stiepleman, co-president of the investment firm Sixth Street, and Sam Cobbs, CEO of Tipping Point Community, the anti-poverty nonprofit Lurie founded before becoming mayor.

“San Francisco’s comeback depends on the recovery of our downtown, and we are bringing every tool to the table to secure that future,” Lurie said in a statement. “The Downtown Development Corporation … will help bring to life our plans for downtown by driving investment, supporting small business, and partnering in our work to keep downtown safe, clean, and vibrant.”

Another newly formed initiative, the Partnership for San Francisco, aims to position San Francisco as a global innovation hub with a thriving economy. The effort is steered by Katherine August-deWilde, a First Republic Bank alum who also served on Tipping Point’s board, and the co-chairs are Laurene Powell Jobs and Ruth Porat, president and chief investment officer of Alphabet and Google.

Partnership for San Francisco is a private entity, but Lurie, who plans to work with the group, came up with the idea, according to the San Francisco Examiner.

Lurie knows the business and philanthropy community well. Along with starting Tipping Point, he is an heir to the Levi Strauss fortune. Financial disclosures with the city show he holds at least $8 million in investments. Lurie has a blind trust to manage his assets while in office.

His latest fundraising push has raised concerns among critics of private influence in politics, including Sean McMorris, a program manager at California Common Cause, a nonpartisan nonprofit focused on government transparency and ethics.

“It’s not that it’s not a worthy cause,” McMorris said about the DDC’s goals. “But it raises the issue of purchasing influence. I’m sure the people who are being solicited are pretty well-heeled and have their own interests with the city.”

In 2022, San Francisco voters passed a law tightening restrictions on public officials soliciting private donations after a major corruption scandal that led to prison sentences for former city leaders, including ex-Public Works Director Mohammed Nuru.

For the Downtown Development Corporation, Lurie plans to seek a waiver allowing behested payments — donations requested by public officials for city projects or initiatives.

This effort is separate from the expanded authority that Lurie gained shortly after taking office through his fentanyl emergency ordinance, which allows him to accept private donations for programs and services related to homelessness and overdose response.

He’s making moves there, too.

Lurie announced the city will scale back some harm reduction programs and require more users to participate in treatment — a resource city officials admit is lacking. The city has added more than a hundred transitional housing beds in the last year, but not a single residential bed for addiction treatment, according to the San Francisco Chronicle.

“The status quo has failed to ensure the health and safety of our entire community,” Lurie said in a release announcing the new requirements for overdose prevention efforts, which has many health providers wondering where money for additional counseling will come from. “Our new policy will connect individuals to treatment quickly, and that is a big step toward reclaiming our public spaces.”